Taiwan shares end down as earlier gains erased

Taipei, Sept. 10 (CNA) Shares in Taiwan closed lower Tuesday as earlier gains were erased amid lingering concerns over possible further volatility on U.S. markets despite a rebound overnight, dealers said.

While many large cap electronics stocks came under pressure, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, remained resilient and kept the tech sector and the broader market from falling further, dealers added.

The Taiex, the benchmark weighted index on the Taiwan Stock Exchange (TWSE), ended down 80.36 points, or 0.38 percent, at 21,064.08 after moving between 20,977.00 and 21,324.43. Turnover totaled NT$328.71 billion (US$10.21 billion).

The market opened up 0.51 percent and soon hit the day's high, rising about 180 points in the early morning session with buying sparked by a technical comeback on U.S. markets, where the Dow Jones Industrial Average rose 1.20 percent and the tech-heavy Nasdaq index gained 1.16 percent overnight, dealers said.

However, as the Taiex breaching the 21,300 point mark, many investors shifted to the sell side, dumping large cap tech stocks, with selling spreading to old economy heavyweights, pushing the broader market into negative territory by the end of the session, dealers added.

"The profit taking showed many investors remain reluctant to chase prices for the moment despite initial gains amid fears over possible head winds on U.S. markets before the Federal Reserve holds a policymaking meeting next week," Moore Securities Investment Consulting Adam Lin said.

The Fed is widely expected to cut interest rates by 25 base points next week, but if the rate cut goes steeper, it will indicate the American central bank's deeper concerns over the U.S. economy, according to dealers.

"Moreover, a TV debate between Democratic presidential candidate Kamala Harris and her Republic rival Donald Trump (on Tuesday U.S. time) could move the U.S. markets. Investors here just do not like such uncertainty," Lin said.

It is no surprise the Taiex gave up its earlier gains but "fortunately, TSMC's strength prevented the local main board suffering more losses as investors still hope the chipmaker will report good sales data for August," Lin added.

TSMC rose 0.56 percent to close at NT$904.00, despite coming off a high of NT$911.00.

After the market closed, TSMC reported its second-highest monthly sales total ever in August, up 33 percent from a year earlier on the back of strong demand for its high end processes in the wake of the booming artificial intelligence era.

TSMC's gains helped the Taiex offset about 40 points of the decline.

However, many semiconductor stocks moved lower with dynamic random access memory (DRAM) chip supplier Nanya Technology Co. down 3.37 percent to end at NT$44.50, and United Microelectronics Corp., a smaller contract chipmaker, falling 0.93 percent to close at NT$53.30.

Smartphone IC designer MediaTek Inc. bucked the downturn, rising 2.26 percent to end at NT$1,130.00.

Amid caution over the movement of the Taiex, "the launch of the latest iPhone 16 lineup failed to give a boost to Taiwanese firms in the Apple supply chain," Lin said.

iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, lost 1.74 percent to close at NT$169.00, and Largan Precision Co., a supplier of smartphone camera lenses to Apple, also dropped 2.96 percent to end at NT$2,620.00.

U.S.-based artificial intelligence chip designer Nvidia Corp. gained 3.54 percent overnight, but Taiwanese AI related stocks largely came under pressure with AI server Quanta Computer Inc. falling 4.20 percent to close at NT$239.50, and Giga-Byte Technology Co., a leading graphics card vendor for AI applications, shedding 4.02 percent to end at NT$239.00.

Old economy stocks appeared mixed throughout the trading session, dealers said.

The food industry rose 2.09 percent, led by Uni-President Enterprises Corp., which gained 3.47 percent to close at NT$87.00 as the company has intensified efforts to strengthen logistics services. In addition, Wei Chuan Foods Corp. ended up 0.84 percent at NT$18.05.

Concerns over possible further credit controls in the home market from the central bank continued to weigh on the construction industry, which lost 2.45 percent.

King's Town Construction Co. fell 4.57 percent to close at NT$104.50, and JSL Construction & Development Co. plunged 10 percent, the maximum daily decline, to end at NT$183.50.

In the financial sector, which rose 0.34 percent, CTBC Financial Holding Co. gained 1.30 percent to close at NT$27.30, Fubon Financial Holding Co. added 0.47 percent to end at NT$86.40, and Cathay Financial Holding Co. closed up 0.16 percent at NT$62.50.

"Investors had better pay close attention to the upcoming CPI and PPI numbers from Washington for more clues about the next move by the Fed," Lin said. The August consumer price index and producer price index reports will be released Wednesday and Thursday, respectively.

According to the TWSE, foreign institutional investors sold a net NT$27.01 billion worth of shares on the main board Tuesday.